Tuesday, April 24, 2012

Eppur si muove!

For over two years, the mainstream political elites of Europe have been battling to save the single currency, seeking its salvation in a German-scripted programme of austerity and legally enshrined fiscal rigour that curbs the budgetary sovereignty of elected governments.

In elections in France on Sunday, in the Royal Palace in The Hague on Monday, and on Wenceslas Square in Prague on Saturday, a democratic backlash appeared to be gathering critical mass as the economic prescriptions of the governing class collided with the street and the ballot box. The collision looks likely to bring down three European governments.

Mark Rutte, the centre-right Dutch prime minister, threw in the towel on Monday, submitting his resignation to Queen Beatrix after seven weeks of fruitless haggling over colossal spending cuts, which are required to comply with new European rules he has done much to design.

After the biggest popular protests in Prague since the velvet revolution brought down communism, the rightwing government of Petr Necas, close allies of David Cameron, teetered on the brink, because of unpopular spending cuts as well as sleaze.

Most crucially of all, the Sarkozy era in France looked to be over, having dazzled briefly and faded fast.

"There's a new uncertainty," said Paul De Grauwe, a leading Belgian economist. "Now we will have to see what will happen with the fiscal pact, and how the markets react."